During our Digital Unwrapped week Justin spoke to Channa Seneviratne, Executive – Technology Development and Innovation, Telstra about enabling advanced 5G consumer services

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Starting with BT, Reza Rahnama, MD of Mobile Networks (pictured) discussed the UK operator’s target to deploy SA 5G across 99 per cent of the population by the end 2030, with the figure currently at 60 per cent.

On the consumer side, Rahnama said the key differentiator with SA 5G was the ability to offer service differentiation and programmability of the network. He pointed to gamers and remote workers as examples, giving users a better experience as more of its network moves to standalone and it is able to create a larger ecosystem.

By ultimately cracking the streaming market, Rahnama believes the network then has excellent potential for potential future AI workloads, essential for the enterprise.

“The consumer market will drive some of it, but I think the true promise of 5G standalone comes from the enterprise. Not only from SMEs but very large enterprises”

He pointed to automation, autonomous vehicle and manufacturing use cases, as well as providing dedicated slicing for companies.

Dynamic slicing
Telstra executive, technology development and innovation, Channa Seneviratne, agreed with Rahnama on the importance of SA 5G, stating the company was aiming to have all of Australia’s major cities covered with the technology by the end of 2025.

For Seneviratne, one of the main benefits of SA 5G lies in slicing, again with enterprise a major focus. He explained the operator rolled out its first product in the area in June, aimed at providing a priority slice for enterprises in congested environments. This will be extended to allow for two slices, with one for priority traffic.

Moving forward, Seneviratne said the company has a clear focus to move towards handset slicing, offering the capabilities in stadiums, arenas and campuses.

“When we think about slicing, we want this to be a dynamic product. We think about dynamic slicing as opposed to a static slice somewhere. To do that, it’s not just about the network, it’s about the orchestration that goes with being able to create a dynamic slice in real time if necessary.”

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In a joint statement, Telstra International CEO Roary Stasko explained the long-term asset sale and purchase agreement offers an opportunity to “strengthen our ability to compete globally, while ensuring continuity and quality for our international voice customers”.

He added it is confident iBasis can deliver “seamless continuity” for its wholesale and retail customers.

The deal, subject to regulatory approvals, will give iBasis a presence in Australia and New Zealand, adding to its operations in Hong Kong and Singapore in Asia.

The agreement covers the transfer of customer contracts and an international team of commercial and operational professionals.

iBasis also will secure exclusive rights for international wholesale voice services for Digicel Pacific, part of the Telstra International’s portfolio. This covers Papua New Guinea, Fiji, Samoa, Tonga, Vanuatu, and Nauru.

iBasis CEO Patrick George said the deal accelerates its “growth trajectory” and strengthens its position as a global wholesale player.

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Net profit grew 31 per cent year-on-year to AUD2.3 billion ($1.5 billion), with total revenue flat at AUD23.6 billion.

Its 2026 guidance targets underlying EBITDA adjusted for lease amortisation at between AUD8.15 billion and AUD8.45 billion, compared with AUD8 billion in 2025.

It earmarked AUD3.2 billion to AUD3.5 billion in capex for fiscal 2026 (the outlay in fiscal 2025 was AUD3.4 billion).

In its earnings call, Brady said the Australian operator registered a fourth consecutive year of underlying growth, “reflecting momentum across our business, strong cost control and disciplined capital management”.

She added it increased profit across mobile, fixed consumer and small business, fixed enterprise, fixed infrastructure and its tower unit.

Stake sale
The CEO also commented on its move to sell a 75 per cent stake in cloud company Versent Group, which it acquired in 2023, to Infosys for AUD233 million. She explained the sale is part of its long-term strategy to focus on core connectivity and means “sharpening our focus” for its enterprise business.

Mobile service revenue for the full-year grew 3.5 per cent to AUD8.5 billion, supported by a 2.1 per cent increase in ARPU to AUD43.71.

Post-paid subscribers were flat at 8.9 million, while prepaid users fell 2.5 per cent to 3.1 million.

IoT revenue increased 1.4 per cent to AUD293 million, with connections growing by 1.2 million to 9.8 million.

The company also announced a AUD1 billion share buyback plan, which followed an AUD750 million repurchase unveiled in February.

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Ericsson stated it holds 50 per cent of the equity, while operators AT&T, Bharti Airtel, Deutsche Telekom, KDDI, Orange, Reliance Jio, Singtel, Telefonica, Telstra, T-Mobile, Verizon and Vodafone have as expected taken the remaining stake combined.

Aduna became operational in September 2024, with a goal to create an ecosystem of companies also including hyperscalers, developers and other industry players committed to advancing APIs and establish a set of common interfaces based on the existing industry-wide CAMARA open source project.

It has also stated its work will be in-keeping with the GSMA’s Open Gateway initiative.

In addition to funding and commercial agreements, Ericsson stated the 12 operator shareholders will provide support through telecom operator relationships, knowledge of the developer community and expertise in network APIs.

Since its formation, Aduna has expanded its ecosystem, with operators including SoftBank Corp and NTT Docomo and five vendors including Microsoft and Syniverse the latest to join the effort.

Anthony Bartolo, who was named CEO of Aduna in January this year, stated closing the transaction was another important step for Aduna.

“In just ten months we have built an impressive ecosystem comprising the biggest names in telecoms and the wider ICT industry,” he said. “The closing provides renewed motivation for Aduna to accelerate the adoption of network APIs by developers on a global scale.”

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Australian Broadcasting Corporation (ABC) reported the company explained in a statement the changes are largely driven by an ongoing reset “of our Telstra Enterprise division” and what it described as “improvements” to “the structure and processes of other teams across our organisation to reduce complexity, create efficiencies and respond to changing customer needs”.

The Sydney Morning Herald broke news of the expected job cuts earlier this week.

ABC reported at the end of its statement, Telstra added: “The changes proposed to our team are not a result of our adoption of AI.”

The 550 jobs represent less than 2 per cent of the company’s total workforce of 31,876 as of the end of 2024.

Telstra unveiled a five-year strategy in May, vowing to step up focus on efficiency and competitiveness across its business. It then announced 1,900 job cuts as part of a shake-up of its enterprise business and cost-cutting measures across network operations and services.

The operator reportedly added in its statement it would consult with staff about the changes and if they go ahead there could be an opportunity to help them find another role at Telstra.

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To access the new service, customers on select plans need a compatible mobile device, limited to Samsung Galaxy S25 series handsets at the start, which has been updated with the latest software.

In a post on the operator’s website, consumer executive Tom Beach noted the service will be rolled out to more devices, without specifying a timeframe.

Beach explained satellite messaging is an intermittent service, with the time it takes to send and receive messages dependent on location, the device and the availability of Starlink direct-to-mobile satellites.

“This means customers are likely to find that some messages are sent or received almost instantly, while others may take many minutes or longer.”

He added the satellite-to-mobile capability is expected to be expanded to data and voice calls.

The operator said in May the launch was coming following extensive testing.

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Brady said it will “double down on connectivity and radically innovate in the core of our business”.

She stated the industry is at an inflection point, as technology and connectivity are transforming again, adding: “How we anticipate and meet changing needs will be critical.”

The company targets an underlying return on invested capital of 10 per cent by fiscal 2030, an increase on the current 8 per cent.

The Australian operator reaffirmed is guidance for fiscal 2025 (ending 30 June), with capex forecast at AUD3.2 billion ($2.1 billion) to AUD3.4 billion, down from AUD3.7 billion in fiscal 2024.

Capital Brief noted some financial analysts expected Telstra to announce more digital infrastructure investment and specific mobile service revenue targets, while The Motley Fool cited Goldman Sachs analysts as stating: “Overall, we are very positive on this strategy for Telstra, seeing it as relatively lower-risk growth.”

Telstra’s net profit for its fiscal H1 increased 7.1 per cent year-on-year to AUD1.1 billion, while total revenue was flat at AUD11.8 billion.

Brady said at the time it was on track to reach its T25 strategy goals.

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In a post, Telstra’s executive for technology engagement advancement Channa Seneviratne effectively admitted it uses external antennas in the measurement.

“Within regional and remote communities, many customers benefit from using external antennas to maximise their coverage. This is why we have used this as the basis for our coverage footprint,” he stated.

Seneviratne avoided addressing the exaggerated coverage claim, adding: “No matter how you look at it, Telstra’s mobile network covers more of Australia than any other. Whether you use an antenna or not, Telstra network is at least 1 million square km larger.”

The executive also noted there is no industry standard for the way coverage is measured.

TPG Telecom called for a regulatory investigation yesterday (19 May), alleging Telstra had engaged in misleading or deceptive conduct for more than 15 years by significantly overstating the geographic reach of its mobile network by as much as 40 per cent.

It questioned Telstra’s claim its mobile network covers an area of 3 million square km, arguing the coverage for most of the operator’s users is nearly 1 million square km less.

Citing analysis of network maps provided for the Australian Competition and Consumer Commission’s latest mobile infrastructure report, TPG Telecom said the data appeared to show Telstra made claims about its network coverage based on signal strength which can only be obtained with the use of a special external antenna and repeater.

TPG Telecom alleges Telstra’s 99.7 population coverage claim is also based on using an external antenna and repeater, and “ignores the fact that very few Australians have this costly equipment”.

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In a post on the operator’s website, Telstra’s executive for technology engagement advancement Channa Seneviratne wrote it commenced a live trial with its regional team, testing satellite-to-mobile messaging in areas outside its mobile network coverage across Australia.

He explained the tests help it to assess the speed with which SMS text messages can be sent and received; how easy it is to connect to a satellite; and how efficiently devices can connect to the satellite network when mobile is unavailable.

Satellite-to-mobile messaging is designed mainly for people in regional and remote areas of the country outside Telstra’s mobile coverage footprint.

Seneviratne stressed the service is really a “just-in-case connectivity layer,” enabling people to establish contact and let someone know they are ok when outside Telstra’s mobile coverage footprint.

“It is, however, not designed to be an emergency service as you cannot text Australian emergency responders directly and calls are not yet available using our satellite to mobile messaging service,” noted Seneviratne. “It is always recommended that anyone planning on visiting remote regions should plan ahead and take extra precautions in the case of an emergency.”

It will also only work outdoors with a clear view of the sky.

Telstra reached a new agreement with SpaceX to deliver satellite-to-mobile service to customers in remote areas in early January, with an initial focus on testing and refining its SMS capability.

Rival Optus is also working with SpaceX to deliver satellite connectivity with an initial focus on SMS before launching voice and data services, while TPG Telecom is partnering with Lynk Global.

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Telstra CEO Vicki Brady explained Worrall’s approach to partnerships, coupled with his experience leading technology and software businesses, “are great fits for our ambitions for Telstra InfraCo”.

Worrall has led Microsoft’s operations in the region since 2017, managing a team of more than 3,000 people.

Prior to that, he worked for IBM for 22 years, holding various senior roles including leading its software services group in Asia Pacific and international growth markets, as well as heading its global WebSphere software business.

Brady noted Riley made significant contributions over his 13 years at Telstra, including leading the work to build Telstra InfraCo’s portfolio, capabilities and credentials.

The operator spun off its infrastructure business in 2018, establishing InfraCo to manage the vast majority of its fixed-line network assets including fibre, subsea cables and data centres.

Nearly two years ago, the operator dropped plans to sell a stake in the unit.

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GSMA director general Mats Granryd (pictured) noted that while the industry’s networks are the foundation of digital economies, the truth is getting a return on that investment is a challenge, with the gap between operator capex and revenue a huge problem and “a threat for our future”.

Granryd insisted the continued gap is clearly not sustainable. “Something has to change. Either we stop investing in capex with dire consequences or revenues must start to increase.”

Spurring revenue grow, he argued requires identifying new opportunities, such as the Open Gateway initiative, which is opening up networks in an API era and creating markets that don’t even exist today.

After just two years, 52 commercial networks globally enable more than 200 APIs, with the operators covering almost 80 per cent of global mobile connections members.

“Open Gateway is gaining momentum and is forecasting solid returns.”

It has big potential for operators and likely an even bigger upside for industries and governments, with research indicating an addressable market of some $300 billion.

He noted at MWC25 more than half of attendees are from outside the mobile ecosystem “all here looking for opportunities”.

Redefine the future
Telstra CEO Vicki Brady underscored the value of operators from around the globe coming together to align around standardised APIs, adding the industry has an opportunity to deliver the sophistication needed for advanced connectivity and get the commercial model right.

“Today we are at the beginning of the next revolution in how connectivity is delivered and consumed, and the sophistication required will mean a step change.”

Brady is optimistic but added “we will not get the value we need unless we redefine the future for ourselves”.

She believes increasing demand for connectivity and rapid data growth is creating a digital infrastructure super-cycle of investment, noting “I see us in the early stages of this cycle”.

Demand for mobile data on Telstra’s network tripled over the last five years, she said.

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The Universal Outdoor Mobile Obligation (UOMO) would require operators to provide access to mobile voice and SMS almost everywhere across Australia. The measure calls for 5 million square km of new outdoor coverage, including more than 37,000 km on regional roads.

Minister for Communications Michelle Rowland noted the government would consult with stakeholders and introduce legislation this year to expand a universal service framework to include mobile coverage for the first time.

Implementation of universal outdoor SMS and voice coverage is expected by late 2027.

Rowland believes the reform will improve public safety, increase resilience during natural disasters and provide an extra layer of coverage in areas previously thought too difficult or costly to reach.

Telstra reached an agreement with Space X in January to deliver satellite-to-mobile service to customers in remote areas.

In 2024, Telstra called for a multi-technology approach to the universal service obligation using a mix of fixed, mobile and satellite technologies.

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Omdia warned less than half of manufacturing companies had adequate cybersecurity in place as it revealed 80 per cent faced a considerable rise in threats during 2024. It stated businesses attacked were hit with resilience or availability issues costing between $200,000 and $2 million.

In its study for Telstra International, the research company noted dangers are growing as companies employ cloud, AI and IoT in digital transformation processes. Omdia explained the costs listed tended towards the higher end when enterprise and corporate systems or production control was affected.

Telstra International head of global enterprise business Geraldine Kor noted the figures put companies in a Catch-22 situation, increasing risks while they deploy much-needed fresh technology to unlock new potential in manufacturing.

She argued companies need a clear security strategy to overcome fragmentation, suggesting “one group or person” is granted “the authority to act on security challenges for mission-critical systems”.

The connectivity player’s global head of cybersecurity Ganesh Narayanan explained relying on air gapping is becoming ineffective as information and operational technologies converge, with Omdia senior principal analyst Adam Etherington suggesting companies should explore “proactive remediation”.

Omdia surveyed more than 500 technology executives globally.

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The Australian Competition and Consumer Commission (ACCC) accused Telstra of reducing the upload speeds of customers on its Belong National Broadband Network (NBN) plan from 40Mb/s to 20Mb/s in 2020 without informing them, while continuing to charge the same price.

In a statement, ACCC commissioner Liza Carver explained the operator failed to reduce the price of the downgraded service despite the wholesale cost charged by NBN Co was AUD7.00 lower a month.

While Telstra never stated the maximum upload speed in the Belong plan, the court found consumers would have “reasonably construed the service… was the same in all material aspects, including upload speed, as it had always been”.

The ACCC added it is seeking declarations, penalties, consumer redress, costs and other orders, with the court to determine the penalty and any consumer redress at an upcoming hearing.

Carter insisted it is “simply unacceptable for a supplier of essential services to mislead consumers when reducing the quality of the services”, adding it expects better from the country’s largest retail broadband internet service provider.

Telstra was fined AUD15 million in late 2022 for misleading internet customers about the actual speeds they could deliver using the NBN.

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The four-year project will see the operator’s radio network upgraded to Ericsson’s latest open RAN-ready hardware and deployment of 5G-Advanced software.

AI and automation technology is set to be used to optimise network management, through self-detection of problems and self-healing.

Ericsson noted the new infrastructure would provide a platform for development of new applications and give the operator the ability to tailor connectivity based on customer need.

Highlighting the fact it and Telstra were founding members of API focused company Aduna, Ericsson explained the new kit would provide the means to “open the network to tech innovators from wider ecosystems via network APIs”.  

Telstra CEO Vicki Brady said: “We are at an inflection point, where customer needs for technology and connectivity are becoming more sophisticated, requiring a step change in how connectivity is delivered and consumed. At the same time, demand for mobile data on our network has tripled over the past five years.”

The executive added its new network infrastructure would “evolve our offering and improve the efficiency of how we use our spectrum so we can increase our 5G network capacity to deliver better consistency of performance, reliability and speed to millions of customers”.

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The fraud indicator service went live in Australia in early February and is expected to improve the bank’s detection rate for fraudulently opened accounts by more than 25 per cent for joint CommBank and Telstra customers.

In a statement, Quantium Telstra and CommBank noted the move expands their anti-scam and fraud collaboration. The operator formed a joint venture in 2022 with data and analytics company Quantium.

The JV said it will soon make the service available to additional partners.

Quantium Telstra CEO Sandy Cameron explained fraudsters show some distinctive behaviours and patterns in mobile phone usage. “When this information is combined with an organisation’s own insights and analysis, fraud indicator becomes a powerful tool to prompt interventions, potentially disrupting fraud attempts earlier.”

She added by accessing insights on how a fraudster uses mobile service, CommBank can better assess the risk that the person is a bad actor and potentially stop fraudulent accounts from being opened.

James Roberts, GM of group fraud at CommBank, stated it is focused on helping customers stay safe by improving early detection and prevention, with measures ranging from sharing behavioural and device-based intelligence with other banks in real-time to collaborating across other industries.

Last year, the pair launched a scam indicator which is designed to detect and intercept suspected scam calls in real time, covering both mobile and landlines.

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The Australian Communications and Media Authority (ACMA) found the operator failed to carry out more than 3,800 tests to confirm the speed of a customer’s new NBN connection could match that specified in a contract.

Telstra reported the failure to the ACMA, claiming they were caused by IT system issues in 2022 and 2023.

ACMA chair Nerida O’Loughlin noted consumers are entitled to expect internet speeds meet those advertised in their NBN plans.

Telstra paid an AUD394,380 ($245,984) fine. The operator told the regulator it initiated an end-to-end review of its maximum speed testing processes and taken steps to address the system issues.

The investigation also found the operator failed to inform customers of underperforming NBN speeds on 34 occasions following tests and charged 157 customers for an NBN service before notifying them about the slow speeds.

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The companies jointly stated consumers with compatible devices in areas where Telstra has the suitable frequencies would experience increased download speeds, albeit not at the level achieved in the tests.

Sri Amirthalingam, Telstra’s executive of wireless network engineering, said the “achievement is more than just a speed record, it improves the network’s capacity, which helps deliver consistency of service irrespective of time or location”.

A live mobile site equipped with Ericsson’s radio equipment running 5G-Advanced software was set up at the operator’s Innovation Centre on the Gold Coast.

Ericsson’s hardware connected through a low-latency cell site router to its packet core gateway along with MediaTek’s chipset technology.

The collaboration combined multiple spectrum layers and advanced connectivity features including New Radio dual connectivity and carrier aggregation.

In August 2024, Telstra deployed Ericsson’s centralised RAN set-up to prepare for the rollout of 5G-Advanced.

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The venture would be 60 per cent owned by Accenture, though its formation is subject to consultation with employees and unions, the newspaper wrote.

Kim Krogh Andersen, Telstra’s product and technology group executive, noted on LinkedIn the venture would bring together specialists from the companies’ data and AI teams, taking advantage of a $3 billion investment scheme Accenture detailed in 2023.

Andersen added the company is looking to “completely reinvent our business and our processes, allowing teams to work in an ecosystem of intelligent AI agents, optimising key tasks end-to-end”.

Startup Daily reported Telstra’s goal is to reduce vendor numbers from 18 data and AI providers and partners to two: a deal with Quantium forged in 2022 and the JV with Accenture.

During MWC Barcelona 2024, Telstra CEO Vicki Brady said an ambition for it to become an AI-powered organisation and leader in Australia would only be achieved through collaborations.

In 2024, Telstra became the first company in Australia to join UNESCO’s Business Council to promote the ethical use of AI.

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Shailin Sehgal, group executive for global networks and tech at Telstra, stated it expects the service to be available from most outdoor areas on mainland Australia and the island state of Tasmania, provided users have a direct line of sight.

Sehgal explained currently direct-to-handset technology only allows users to send text messages, though added Telstra would explore adding voice, data and IoT connectivity as the satellite technology evolves.

He stated the deal adds to a current partnership with SpaceX to provide low Earth orbit (LEO) satellite broadband connectivity to consumer and business customers.

Telstra also has a deal with OneWeb to deliver mobile backhaul to remote areas.

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The Australian Communications and Media Authority (ACMA) noted the operator updated its backup phone number list and appointed an independent consultant to conduct a review after the agency found it failed to comply with emergency call rules.

An investigation spotted 473 breaches of the rules during an incident on 1 March, when Telstra’s call centre had trouble transferring calls to emergency services for 90 minutes.

It initiated a contingency process to transfer calls using a list of backup numbers, but several were incorrect, resulting in 127 calls not being passed over.

The operator managed those calls by providing the caller details to emergency service organisations via email and phone calls, ACMA explained.

ACMA member and consumer lead Samantha Yorke noted it was concerning the breaches occurred because Telstra neglected to update its backup phone data.

Yorke acknowledged Telstra had a strong record of compliance in its role as the national emergency operator and made considerable efforts to keep the public informed during the outage.

She added Telstra took a variety of immediate actions when problems were identified, which “go a long way to restoring the community’s trust in this critical service”.

In October, ACMA introduced rules to ensure mobile subscribers can access emergency services after operators switch off 3G networks.

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Boost Mobile chair Peter Adderton reportedly stated the change of ownership would not impact customers.

He said the deal is “the natural evolution of the brand”.

Boost Mobile has used Telstra’s mobile network for more than ten years: it reported nearly 1 million subscriptions earlier in the year.

GSMA Intelligence data ranked Telstra as the largest operator in Australia by subscribers at end-September, with prepaid users of 6.2 million accounting for around a third of its total.

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The Automated Energy Saver (AES) identifies optimal times to turn antenna branches on or off based on real-time data, in turn optimising the 5G new radio network’s Massive MIMO sleep function. Ericsson explained the system balances power saving with maintaining customer experience, noting a key element is the ability for the operator to assign specific quality levels to a particular node.

Ericsson added its work with Telstra is a vital step towards programmable, intelligent and performance-based networks. The companies are also evaluating augmented carrier aggregation.

AES is offered as part of Ericsson’s 5G-A software products. It stated the set-up forms an element in a broader shift towards intent-based automation, where service-based metrics are employed in the RAN in place of manual parameters.

Ericsson stated manually setting sites to the “sweet spot between energy savings and network performance is extremely challenging” for operators, though argued this makes the task “a perfect use case for intent-based automation”.

Telstra network engineering executive Sri Amirthalingam said the AES is a key step in a move towards intent-driven networks by the operator as it moves to “optimise performance without impacting the experiences of our customers”.

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Once the project is complete, it will supply Telstra with about 210GWh (Gigawatt hours) per year.

Kim Krogh Andersen, Telstra’s product and technology group executive, said the new contract boosts the total value of its renewable energy generation projects to more than AUD1.4 billion ($843.3 million).

The operator has lined up seven power purchase deals.

The solar farm, which is under construction, is owned by Global Power Generation Australia, the local subsidiary of Global Power Generation.

Last December, it forged an AUD130 million agreement with Global Power Generation to purchase 153GWh of solar power a year.

Telstra in June raised its direct and indirect (Scope 1 and 2) greenhouse gas emissions reduction target from 50 per cent to 70 per cent by 2030, with an increased focus on decarbonisation projects that will reduce Telstra’s overall footprint.

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Net profit dropped 12.8 per cent to AUD1.8 billion ($1.2 billion) on revenue flat at AUD23.5 billion.

In its earnings release, CEO Vicki Brady explained while most parts of its business performed strongly, fixed enterprise “is clearly a long way from where we need it to be. We commenced action during the year to address challenges…and took additional action on cost overall”.

Fixed enterprise sales fell 5 per cent to AUD3.5 billion and EBITDA 67 per cent to AUD136 million. The unit booked an AUD311 million impairment charge.

The company recorded AUD715 million in total impairments, restructuring costs and other guidance adjustments.

Brady added with the changes it is confident in achieving an AUD350 million cost reduction target by the end of fiscal 2025.

She insisted its fiscal 2025 strategy is on track and is “optimistic about the opportunities ahead”.

Telstra earmarked AUD3.2 billion to AUD3.4 billion for full-year capex compared with AUD3.4 billion in fiscal 2024.

Mobile gains
Mobile service revenue increased 5.6 per cent to AUD8.2 billion, aided by subscriber and ARPU gains.

Prepaid subscribers rose 5.4 per cent to 3.8 million and post-paid 1.3 per cent to 8.9 million.

ARPU for prepaid was up 10 per cent to AUD27.14 and post-paid flat at AUD52.49.

Product sales remained at AUD2.4 billion.

The company said 5G population coverage reached 89 per cent, with 54 per cent of mobile traffic on the infrastructure.

InfraCo fixed revenue grew 7.4 per cent to AUD2.7 billion and international sales, covering wholesale and enterprise, 6.1 per cent to AUD2.6 billion.

Revenue was flat at Telstra Business and the networks, IT and products unit.

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The operator explained in a statement it will work with UNESCO and other members to support policy development in critical areas, such as data governance and diversity, with the aim “to champion and advance the ethical development and application of AI”.

The organisation’s recommendation on AI advocates for the technology to be governed by values that promote human rights, dignity and environmental sustainability. The Business Council also works to develop an ethical impact assessment tool, as well as joint initiatives to ensure AI serves the public good, the statement added.

Kim Krogh Andersen, Telstra’s group executive of product and technology, said its membership is about translating the recommendation into “practical action and tangible outcomes”.  He added AI is a transformative technology with the potential to benefit societies globally, but “requires very careful and deliberate stewardship”.

Telstra said it has worked with the federal government to pilot and test AI ethics principles and co-authored the Responsible AI Playbook with the GSMA. 

Meanwhile, Australia’s largest mobile operator by subscribers last week unveiled plans to re-prioritise its climate change investments by moving funds away from the purchase of carbon credits in favour of decarbonisation projects that will reduce its footprint overall.

Chief sustainability officer Justine Rowe noted in post the move will deliver additional cost savings over time as it reduces its energy bills.

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In the opening keynote, technology executives from AT&T, Telstra and Vodafone Group all separately indicated they see signs that AI, in particular, could provide the industry with a major boost.

While acknowledging recent return on investment and growth as “not good enough”, Kim Krogh Andersen, group executive product and technology at Telstra (pictured, standing), said he felt the industry had reached an inflection point which could be considered a massive opportunity.

He explained “our core products have never been more important”, particularly in the era of AI, adding the technology should be deployed in layers spanning application; data; compute; and the network.

Andersen added it is “a bit ridiculous” for an operator to pursue the “telco to techno” strategy, arguing companies across all industries essentially need to be technology companies if they want to compete.

Refresh
Vodafone CTO Scott Petty said there is a rejuvenation underway in the industry and “you can really start to see growth” across many telecoms organisations.

While this was good for overall businesses, he outlined the tough task ahead for technologists, who are now in the process of testing the transformative power of AI with every vendor, consultant and analyst.

Petty added generative AI offers operators an opportunity to become a true platform company.

“It will really change the way we operate as organisation. We need to get our platforms right.”

Delivering a slightly different message, AT&T CTO Jeremy Legg pushed a strategy of convergence, outlining the company’s goal of becoming a single connectivity provider for consumers “across broadband, wireless, satellite and Wi-Fi.”

“We ultimately think that a consumer is going to want to get their connectivity from one place rather than multiple places, given the simplicity that that would offer to those consumers and their ability to be connected wherever they are.”

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Telstra last week revealed plans to cut 2,800 positions, or 9 per cent of its total workforce, as it reorganises its enterprise business, citing challenging market conditions. It is reducing the number of products in its enterprise network and services unit (NAS) by nearly two-thirds, and simplifying its customer sales and service model, it explained in a statement.

On a call to announce the restructuring, CEO Vicki Brady said the company is at the start of a detailed review of its enterprise business, which is still ongoing. “It will take some time to progress all of those actions to set it up for success.”

The operator forecast one-off restructuring costs of AUD200 million ($133.4 million) to AUD250 million in fiscal 2024 (ending 30 June) and 2025.

Meanwhile, revenue from Optus’ wholesale, fleet and enterprise unit in fiscal H2 2024 (ending 31 March) dropped 15.7 per cent year-on-year to AUD612 million, largely due to Optus Enterprise reporting declines in fixed carriage revenue attributed to churn and price erosion. The operator also pointed to National Broadband Network-driven profitability and margin pressure in fixed data.  

Weakness in the fixed enterprise business contributed to a 1.1 per cent drop in overall operating revenue to AUD4 billion.

One-off charges
Optus recorded non-cash impairment charges of AUD551 million on its enterprise network assets, forcing parent Singtel to book a large impairment charge. 

As part of Optus Enterprise’s refresh strategy in the face of macro-economic headwinds, it is also cutting its product category from more than 250 to less than 100 and reducing the number of vendors from more than 100 to 16. Given the structural decline in fixed voice, the operator said it is shifting to systems-as-a-service (SaaS) offerings, exiting unprofitable businesses and taking a mobile-first strategy.

Adding to its woes, Optus is recovering from a network outage in November 2023 affecting 10 million customers and denting their trust, leading to the resignation of CEO Kelly Bayer Rosmarin. She was replaced by board member Michael Venter as interim CEO, with Stephen Rue, head of Australia’s NBN Co, to take the role in November.

Optus also faces a case filed by the Australian Communications and Media Authority for failing to protect customer data following a cyberattack in September 2022.

Improved outlook
GSMA Intelligence director of research and commercial content Pablo Iacopino noted Australia is a promising B2B market opportunity for mobile, fixed and value-added services, suggesting Telstra’s restructure was driven by a short-term imbalance between fixed and variable costs. 

The country’s enterprise network services market increased 4.6 per cent in 2023 to $790 million after declining in 2022, data from Statista Market Insights showed. The company expects revenue growth to hit 7.1 per cent per annum from 2024 to 2028, topping $1 billion in 2027.

Iacopino said Telstra’s high margin calling service was hit by an ongoing shift from traditional voice to cloud applications, impacting overall EBITDA. An unexpected decline in professional services was triggered by fewer new client projects following a previous period of strong growth. 

While overall fixed B2B revenue growth was affected, he said the real challenge is on profitability, as some of the costs are fixed, with significant set-up expenditure based on higher growth projections making it difficult to adjust based on what is in the pipeline.

He noted Telstra recently confirmed the medium-term outlook for the fixed B2B segment is positive, with cloud revenue and equipment sales continuing double-digit growth, while other services face challenges.  

Profit pressure
Omdia senior principal analyst Adam Etherington told Mobile World Live most operators globally are under EBIDTA pressure as the cost to deliver connectivity and bandwidth rises, while ARPU declines due to OTT demand and digitalisation across organisations.

While a turnaround in enterprise will take time, investors were reassured by Brady reaffirming Telstra’s underlying EBITDA guidance for fiscal 2024 at AUD8.2 billion to AUD8.3 billion and setting the target for fiscal 2025 at AUD8.4 billion to AUD8.7 billion, compared with AUD8 billion in fiscal 2023. 

Optus’ EBITDA in fiscal H2 rose 4.8 per cent to AUD1.1 billion, but for the full year it was flat. It did not provide guidance for the current fiscal year.

Brady added on the call “there is real strength and opportunity” in enterprise in the medium- to long-term, pointing to AI fuelling the need for processing capacity, which requires connectivity across networks.

She estimates the transition will likely take two-to-three-years. “It’s going to take real planning” and work with customers. “You don’t just automatically make the decision today to simplify the portfolio and it happens the next day.”

Etherington pointed out Telstra’s share price took a beating after the restructure announcement, even though cutting costs is “an unenviable but necessary way to regain profitability in the short term”.

“My concern is whether Telstra is investing in the people, expertise and capabilities necessary to win in the NAS market,” he said, adding its tech services business Telstra Purple assembled solid capability and, with its legacy network assets, should be in a position to seize growth in B2B IoT, edge, cloud, AI and security.

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In a statement, CEO Vicki Brady explained it is putting measures in place to reset its enterprise unit which faces challenging market conditions, to ensure Telstra can continue to invest to support ever-increasing growth in data volumes on its networks.

Brady noted with many enterprise products and services discontinued, it will begin reviews on 377 positions immediately, adding many roles require consultation with employees and unions.

The operator forecasts one-off restructuring costs of AUD200 million ($133.4 million) to AUD250 million in fiscal 2024 (ending 30 June) and 2025, and expects to reach a previously set target of cutting its outlay by AUD350 million by end-June 2025.

In addition to the enterprise changes, the company will shift its Global Business Services function into other parts of the business to simplify processes.

Telstra stated a review of its enterprise unit is ongoing, with an update on progress and the next steps to be provided with its full-year results in August.

Brady reaffirmed its underlying EBITDA guidance for fiscal 2024 at AUD8.2 billion to AUD8.3 billion and set the target at AUD8.4 billion to AUD8.7 billion for fiscal 2025.

Underlying EBITDA was AUD8 billion in fiscal 2023.

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